Basics of SCM
A typical supply chain of an enterprise is restrained in its scope both on the supply side and on the customer side. On the supply side, it is restrained by the supplier’s suppliers, while on the customer side it is restrained by the customer’s customers. Thus for effective supply chain management a lot of factors on both the sides need to be balanced and nowadays technology plays a huge part in this endeavor. However, to understand and construct what could be termed as an ideal supply chain management setup – the following problems should be addressed:
Distribution Network Configuration: This is the number and location of suppliers, production facilities, distribution centers, warehouses, and customers. The ideal mix needs to be chalked out to map out the intensity of the SCM effort.
Distribution Strategy: This pertains to the strategy adopted for the distribution channels. The decision to go for a centralized or de-centralized, direct shipment or cross docking, pull or push strategies, third party logistics need to be taken and the required resource for executing such strategies needs to be planned out.
Information: In this cut throat world of business, information is power. Thus, to integrate all the information packets, all systems and processes through the supply chain need to be connected via a robust information ‘capture and share’ system. This would enable the different nodes in the supply chain to share valuable information, including demand signals, forecasts, inventory, and transportation.
Inventory Management: One of the core aspects of a supply chain is its inventory management strategy. The ideal mapping of the quantity and location of inventory including raw materials, work-in-process, and finished goods needs to be done to enhance the market delivery factor.
Although, the points mentioned above are basic indicators, if implemented judiciously have the potential to make a winner out of any SCM system.
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